Conference 7.286::digital

    The list that we got in the SBU is more extensive than what you related:
    
    Office Supply Expenses
    Management Consulting
    Temporary Labor
    Training
    Travel
    Software Purchases
    Relocation   
    Telecommunications 
    Advertising 
    Capital Equipment 
    Property/Facility Moves 
    
    This will hurt us all, but it's the job we have to do for the next few
    weeks.
    
    Mark

re Note 4616.0 by SCASS1::UNLAND:

>     Even though there are less and less qualified people,
>     the workload hasn't changed. 

        An added irony is that the ABU has been spending a lot of
        effort lately trying to rid itself of some of its most
        qualified people.

        Bob

	Would you please post the memo so we will have a better idea on 
how to respond if we see the need to...

Thanks,

Dennis 

    The memo from Bob Palmer is dated last Friday.  Yesterday a friend
    mentioned to me that there's a big pharmaceutical boondoggle going on
    this week at the Stage Neck Inn in Maine.  In her words, the place was
    "swarming" with Digital people.

    Now I suppose one could argue that it was booked and paid for long in
    advance, but given that Digital has been in financial straits for years
    now, it seems like there's lots of room for improvement in the upper
    classes of Digital!

    Classic "do what I say, not as I do".

    Kevin

Why didn't this memo appear in LIVEWIRE?  I have yet to see it.

                   I N T E R O F F I C E   M E M O R A N D U M
    
                                            Date:     22-May-1996 01:34pmEDT
                                            From:     Vincenzo Damiani @OGO
                                                DAMIANI.VINCENZO@A1@SALES@AKO
                                            Dept:     VP & GM ABU
                                            Tel No:    
    
    TO: See Below
     
    Subject: Urgent Q4 Actions                                              
    
        The ABU is facing a critical challenge. Although our year-over-year
        product revenue has grown 20% and we have substantially reduced our
        spending, we are still a significant distance from meeting our
        financial commitment to the corporation. With only a few weeks left
    	in this quarter, we must act with a great sense of urgency if we are
    	to meet our fourth quarter goals.
    
        Today I am asking your commitment to immediate action in two areas.
    
        First, we must become extremely vigilant in examining every
        discretionary expenditure. I have attached a memo from Bob Palmer
    	which outlines company-wide actions to cut costs and make Digital more
        competitive.
    
        To support this initiative, I want to immediately stop all
        discretionary spending that is not directly in support of Q4
    	revenue generation, including management consulting and temporary labor,
        training programs, travel, software purchases, capital equipment,
        relocations and facility moves. Any exceptions must come from one
    	of the geography vice presidents -- Chris Conway for Europe,
    	Kannankote Srikanth for the Americas -- or from George Cooney, ABU 
    	finance.
    
        Second, we must stay focused on Q4 business and on the ABU's mission --
        to enhance our customer's competitive advantage in their marketplace
        with leading IT solutions through our people, our products and our
        partners, on a worldwide basis. It is essential that we push hard to 
     	bring in all possible business, particularly large projects like
    	those we have won recently at major accounts such as Dow Chemical, 
    	Telia, Korea Telecom and ICF.
    
        I rely on each of you to act with energy and enthusiasm to aggressively
        engage our customers and deliver on our commitment to the corporation.
        Together we form a formidable force, one that no competitor can
    	equal.
        I am confident that we will continue to win against our competition
    	and achieve our objectives for this quarter.
    
        Regards,
        Vincenzo
    
    ----------------------------------- NEW PAGE
    -----------------------------------
    
    
    
    
    
    
    
    
    
                     I N T E R O F F I C E   M E M O R A N D U M
    
                                            Date:     17-May-1996 
                                            From:     Bob Palmer @MSO
                                                      PALMER.BOB
                                            Dept:     CHAIRMAN, PRESIDENT &
    CEO
    
        To:       Digital Senior Managers           
    
        Subject:  Communication Plan for Q4 Cost Cuts
    
        When I talked to the management team about Q3 earnings last month, I
        discussed the importance of focusing increased attention on
    	managing our costs.  The fact is that our top competitors remain more
    	efficient.
        This means we are at a competitive disadvantage when it comes to
        delivering products and services to our customers at an attractive
        price.  We will not achieve greater market share and leadership
    	levels of profitability if we do not have competitive costs.
    
        What is required is a short-term series of actions to deal with an
        unacceptable increase in discretionary spending in the current
    	quarter, and a long term change in attitude.  We must look at every 
    	item of discretionary spending and ask:  Is it really necessary?  Does
     	it help us better serve our customers or partners? Can it be postponed
     	or eliminated?
    
        As a management team, we need to be more involved in the detail of
    	how every dollar is spent.  I expect you to show personal leadership
        and to set an example for our employees by addressing these issues in
        your own area.
    
        This is not a one-time exercise.  It represents prudent, ongoing
        management of our assets, and it is in line with the targets we set
    	for ourselves at the beginning of the fiscal year.  Even though we have
        achieved six consecutive quarters of profitability, we have not
        achieved profit comparable to the industry leaders, and we must
        continue to look for efficiencies in our operations.
    
        Of course, competitive costs alone will not make us successful.  In
    	the long run, our success will depend on a clear focus on growing our
        business through a relentless commitment to satisfying our
    	customers and partners.  That is the real test for us as managers and 
    	for our business.
    
        It is also important to remember that we have significant strengths
    	as a company, including a growing portfolio of industry leading 
    	products and services, loyal customers and dedicated, talented 
    	employees. Our goal for Q4 is to have a strong finish in this year of 
    improving profitability and growth, and to establish a solid foundation for
    the year ahead.
    ----------------------------------- NEW PAGE
    -----------------------------------
    
    
    
    
    
    
        Please feel free to share this information as appropriate with the
        people in your organization.
    

    Actually, we had a bit of a discussion here about how and when training
    should happen...  We are largely between projects here, and have
    "several" people available and pursuing 911s...  
    
    It seems to me that this is the PERFECT time to get people trained for
    some new skills that we'll need when things pick up.  Yeah, I know that
    in the short-term it'll cost, and digital is focusing on the
    short-term, but it just seems to make sense that now would be a better
    time for training than in THE MIDDLE of a project when people could be
    USING what they've learned.  Or LOSING a project because we don't HAVE
    the skills needed...
    
    Obviously, I'm missing something...

    Dear Bob,
            We all share your concerns and will do our best,but could you
    please take into account the clients we are rapidly losing?Every day a
    panic mail comes out from the field asking for an urgent delivery
    resource.Is this bad planning or bad management?Yes costs are a big
    issue but do you actually see the administrative waste and sheer
    difficulty customers have in doing business with Digital.It is getting
    to a point where making customer committments is embarrassing.Why don't
    you give every employee,including EVERY manager,a personal metric to
    SELL in a customer facing situation.You would fix the problems of
    Digital in 6 months,forever.
    stuart

re Note 4616.6 by Vincenzo Damiani "Urgent Q4 Actions":

>         Second, we must stay focused on Q4 business and on the ABU's mission --
>         to enhance our customer's competitive advantage in their marketplace
>         with leading IT solutions through our people, our products and our
>         partners, on a worldwide basis. It is essential that we push hard to 
>      	bring in all possible business, particularly large projects like
>     	those we have won recently at major accounts such as Dow Chemical, 
>     	Telia, Korea Telecom and ICF.

        I know that people always talk like this, but is anyone else
        struck by the possible disconnect between the mission of "to
        enhance our customer's competitive advantage" and the
        direction to "bring in all possible business"?

        Bob

    I'm a manager in the SBU chain, and haven't received any notices or
    forwards of any such action messages, either from the management
    structure or via other channels.  So at least for now, nothing has
    changed in our Q4 plans.  Of course, things may change in 5 minutes,
    but that's to be expected.
    
    Mark
    

    
    
    I can't begin to tell you how many 'thousands of dollars' revenue 
    opportunities we have to turn away because we don't have the resources
    because we didn't spend the 'hundreds of dollars' in training. 
    
    You can look at it as a little money saved or alot of money lost. 
    

I deleted the former .12 as it posted two memos without apparent permission
of the authors, and one of them was classified "DIGITAL CONFIDENTIAL" meaning
that it cannot be posted in an unrestricted notesfile even with permission.

				Steve

    re .9
    
    'Projects' also have this really odd characteristic called a 'Long
    Sales Cycle'. Pedants may say that *if* my potential project (maybe
    close in Q1 or Q2 next fiscal ?) requires me to burn some of that
    horrible 'discretionary' expenditure this quarter, then I shouldn't do
    any more work for the next five weeks - this would help me help the ABU
    meet this quarters target, and probably ensure the project goes away
    completely....
    
    [sound of padded van approaching.]
    
    
    

 

       "It is essential that we push hard to 
        bring in all possible business, particularly large projects like... etc"

	Mmm. It is interesting that whenever I've been involved in reviewing a 
project that is in difficulty, there are common features in a high proportion of 
cases:

- rushed qualification.
- inadequate review of risks.
- no contingencies.
- priced on an early ballpark estimate.
- low margin from day one.
- won in late June.

Brian

    Being in manufacturing, my personal favourite is when in the last few
    weeks of the quarter someone decides to "pull in" orders scheduled for
    the beginning of next quarter...to improve "revenues".
    r
    

    We received this down the chain of command, over the ABU wall, around
    te SBU corner onto my desk.   Hmmmmm....there is some interesting irony
    here with this.
    
    The real question here is two fold, are our expenses of doing business
    really out of line within the context of our Q4 revenue load (what we
    have on the shop floor right now to ship by June 28) or are our
    expenses *really* out of line within the context of our competitors.
    
    Senior management will tell you yes definitely on the second half.  HP,
    IBM, Sun, SGI etc.. all get a higher gross revenue per employee than we
    do.  Hence the statements surrounding maximizing our Q4 revenue per
    employee.  Now, if you bring in orders early, and ship early than you
    collect the money early and suddenly it takes a lot of heat out of the
    system.  We look good on Wall street when the numbers get published,
    everyone pats each other on the back, we again get to say that we have
    improved revenues and performance quarter to quarter, these are all
    real good things.
    
    If you also cut your discretionary expenses, then it's a double pay off
    provided you have the "Load" going in manufacturing to your advantage. 
    Revenues increase, expenses get reduced, result is profit goes UP!
    
    The problem is that you can not turn this aircraft carrier in 30 days. 
    There is too much momentum in the system.  They can try, but
    realistically are we going to stop selling and stop bidding on projects
    because we can't buy paperclips.  Doubt it.  
    
    What management needs to do is somehow take the global view (bring in
    the business, cut costs) and help us as individual employees internalize
    it so we can help them with the problem.  If you don't help someone
    associate with the solution you will not get their buy in to fixing the
    situation.  Throwing these e-mails over the wall are just d-returns. 
    They go out into the wastebasket faster than yesterday newspaper.
    
    Can the mumbo jumob Dilbert speak.  Tell us exactly what you want to
    have happen, give us the tools and technology to do the job, remove the
    impediments to getting to YES, and turn us loose.  You won't believe
    the results you will see.
    
    Mav 

    This is not a one time exercise. It will happen at the end of every
    quarter.

    Re .17
    
      Then why isn't the message directed at the ones that are failing in
    that area instead of addressing the message to everyone?  I would think
    that addressing those that are in violation/fault would be more
    appropriate.
    
    Jim Morton

First I think we have a terminology problem here. I think earlier the
term "bring in" was used in the context of finding new customers/orders as
opposed to pulling in booked orders from next qtr into the end of this qtr.

As far as the revenue per emp goes, pulling in next qtrs orders into end
of Q4 probably results in...

1 Overtime rates to build product
2 "Extreme" measures to acquire parts ("Whatever it takes" = "No expense is too
  great").
3 Plant capacity is overdesigned to accomodate end-of-quarter skew (well - some
  of it anyway).
4 Under utilization of capacity in week 1 to 5 of any given qtr.


Oh yeah. In order to "pull in" orders, don't you think we have to call these
customers up and ask if it's OK? If I were a customer I know when I'd schedule my
orders - July wk3. I'd sit by the phone just waiting for the sales guy to call
asking to ship early - then I'd squeeze out a discount/perk/freebie. 

5 Sold at discount.

Someone - please tell my I've got it all wrong!

Pretty please?!?!?

    I've only been here 27 years, but I can tell you the idea of 'pulling
    in' at year end is not new. Every year we go through this, people jump
    through hoops, customers know it will happen and negotiate accordingly.
    
    I think it is rearely NEW business, just business we would have shipped
    next year anyway, but pulled-in at extra cost and effort, so net effect
    is we loose revenue.
    
    But I suspect it will always happen. I wonder if IBM or HP go through
    this same game?

I think the Q4 "pull in" is SOP in business. I've seen it everywhere
I have worked. Except for government contracts. 

I can remember the days at Inmos (now defunct) when I was routinely
asked to modify the equations of the "book to bill" program so the
results would look better. I was always told it was being made "more
realistic". :*) liesl

> A large customer wanted to order (and pay for!) 500 LN03 toner kits.

Sell them consulting on how to use less.  We should be experts on that.

___Pete

re.22:

The person responsible for those decisions should be fired. Why don't you
forward your note to an appropriate officer of the corporation?

Dave.

    Could you set up a re-fill operation? A few new ones to get started
    (swap new for old) and start refilling. Long term income$.
    
    Environmentally friendly too!
    
    r
    

>    Could you set up a re-fill operation? A few new ones to get started
>    (swap new for old) and start refilling. Long term income$.
    
>    Environmentally friendly too!

  Yes but... even that has to be funded by someone.  Haven't you read note
  4606?

  	mikeP

    Another reason I can't stand the phrase "Whatever it takes".  We don't
    stand behind it.  We should go back to "Do what's right"...
    
    Jim Morton

    
    <---- I thought it was "Do the right thing", or, possibly, "It's your
    thing, do what you wanna do."  Something like that.
    
    Bill

    Bill,
      It's been a long time since I saw the statement.  But the idea is
    there.
    
    Jim Morton

| <<< Note 4616.28 by CSC32::MORTON "Aliens, the snack food of CHAMPIONS!" >>>

| Another reason I can't stand the phrase "Whatever it takes".  We don't
| stand behind it.  

	Sure we do. We aren't going to make enough profits, so we do whatever
it takes. Layoffs, no supplies, etc. Oh... that's supposed to be something for
the customers... sorry.... :-)

    "Whatever Is Right, Do It" -- even has a good acronym, WIRDI.
    
    (Where are you, Karl Barth?)
    
    Cheers,
    
    Roy

>    "Whatever Is Right, Do It" -- even has a good acronym, WIRDI.
    
    How about "WhatEver Is Right, DO" -- WEIRDO.

>    How about "WhatEver Is Right, DO" -- WEIRDO.

WEIRDO might go better with "WhatEver Is Right, Do Otherwise," a frequently
heeded bit of, ahem, wisdom.

						Brian